A Strategic Shift Toward Bitcoin ETFs

The roadmap has been submitted to the Presidential Committee on Policy Planning and includes a comprehensive framework covering investor protection, custody infrastructure, and evaluation mechanisms. Key aspects of the plan focus on regulatory standards, anti-manipulation measures, and improved fee transparency.

In a formal statement, the FSC emphasized its intent to “develop a foundation for launching crypto ETFs by establishing systems for issuance, custody, operations, and investor safeguards.”

From Restriction to Innovation

Historically cautious in its approach to digital assets, South Korea had previously banned crypto-linked investment products for retail investors. However, the landscape is now shifting under the leadership of President Lee Jae-myung, who campaigned on making South Korea more welcoming to digital assets. His administration now appears ready to deliver on those promises.

Staying Competitive in the Global Crypto Race

As the United States and the European Union continue to advance crypto-friendly policies, South Korea is determined not to be left behind. The roadmap goes beyond Bitcoin ETFs—it also includes the introduction of a Korean won-pegged stablecoin by the end of 2025. This initiative is seen as a response to concerns highlighted in a 2024 IMF report, which warned of over $40 billion in capital outflows during early 2025.

South Korea’s Growing Role in the Crypto Market

According to FSC data, South Korean citizens held over 104 trillion won in crypto assets by the end of 2024. The introduction of spot Bitcoin ETFs is expected to increase both institutional and retail participation significantly.

Experts believe that the upcoming ETF framework will open new doors for investors and could solidify South Korea’s position as one of Asia’s leading crypto finance hubs.

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Bitcoin ETFs Still Banned, Yet Demand Remains High

Currently, spot Bitcoin ETFs and institutional crypto investments are not legal in South Korea. This means that the entire trading volume comes from retail investors. Ki Young Ju, CEO of on-chain data platform CryptoQuant, stated that all three major candidates support Bitcoin ETFs and institutional investments.

All three major South Korean presidential candidates support #Bitcoin ETFs and institutional investment.

Currently, Bitcoin ETFs and institutional investments are banned in Korea. 100% volume comes from retail. pic.twitter.com/hL6cKci5VK

— Ki Young Ju (@ki_young_ju) May 14, 2025

New Promises from the Democratic Party

On May 6, Democratic Party leader Lee Jae-myung promised new regulations aimed at legalizing spot crypto ETFs, reducing transaction fees, and creating a safe investment environment for young people to plan their future. However, the party had made similar promises during its previous election campaign, but no concrete progress was achieved.

Promises Made, but Past Actions Raise Doubts

While the candidates’ crypto-friendly approaches raise expectations for expanding the legal framework of digital assets in the country, experts warn of past experiences. Blockchain advisor Anndy Lian noted that the candidates’ positions resemble recent developments in Hong Kong but emphasized that success depends on various factors:

“A pro-crypto president could initiate a reform process aligned with global trends, like in the US, where Bitcoin ETFs have seen billions in net inflows. But similar promises were made in the past, without real action.”

Lian also reminded that the People Power Party, which came to power in 2022, had pledged to lift the ETF ban and revise the controversial “one exchange – one bank” rule. However, these goals were not realized before President Yoon’s impeachment.

Hong Kong’s ETFs Disappointed Expectations

Meanwhile, Bitcoin and Ethereum-based ETFs, which began trading in Hong Kong on April 30, 2024, fell short of expectations with lower trading volumes compared to their US counterparts. This suggests that the success of similar products in South Korea would depend not only on regulation but also on investor interest and market conditions.

The steps to be taken in South Korea could have an impact not just regionally, but globally. However, true reforms require more than political promises.

You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.

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